Manitoba First Nations Face Most Oversight By Ottawa

Financial problems have forced Ottawa to assume full or partial control of about one-third of the province’s First Nations over the last several years, the highest rate of oversight of reserves in Canada.

With financial woes at Peguis First Nation again raising questions about the state of band management in Manitoba, new figures released by Indian and Northern Affairs Canada show 21 bands are currently managed entirely by a third party such as an accounting firm or are co-managed in partnership with the chief and council.

That number could rise to 22 next week. Ottawa is preparing to appoint a co-manager to help run Peguis, the province’s biggest band, which is saddled with a $20-million debt. Peguis Chief Glenn Hudson has said INAC’s decision doesn’t reflect the progress he’s made in the last three years getting the band’s finances in order and securing a funding extension from Ottawa. If Peguis is placed in co-management, Ottawa will be in full or partial charge of almost 46,000 Status Indians, a little more than the population of Brandon.

Normally, Ottawa appoints a co-manager or a third-party manager when a band’s finances are in disarray and the band is unable to comply with federal funding agreements, when an auditor raises red flags or when deficits soar above eight per cent of revenues.

Ottawa has also stepped in to take over bands when political turmoil paralyses a First Nation, as it did in Pine Creek more than a year ago.

For the last several years, the number of bands in third party or co-management has hovered at just over 20. In 2006, there were 22 bands under INAC’s full or partial guidance and three years earlier there were 21.

In Ontario, the finances of 21 bands — about 16 per cent of the total — are controlled fully or partly by INAC. In Saskatchewan, 20 bands out of 70 are under some form of third party or co-management. That’s 29 per cent.

Assembly of Manitoba Chiefs Grand Chief Ron Evans said it’s tough to improve governance and financial management when bands hold elections every two years, meaning chiefs often don’t have time to make real changes.

The AMC is pushing for four-year terms to make bands more stable.

And, Evans said, First Nations funding has been capped at 1996 levels with only two per cent annual increases, meaning budgets fall well behind inflation.

"Is it any wonder that First Nations run up deficits?" said Evans. "Demographic and fiscal realities are on a constant collision course."

The news isn’t all bad. Some bands are pulling themselves out of crisis or are winning kudos for good management.

Last year, the right-wing Frontier Centre singled out three Manitoba bands — Rolling River, Swan Lake and Mosakahiken — for their open and accountable administration systems and elections. And Sandy Bay Chief Russell Beaulieu, whose community on the western shore of Lake Manitoba has suffered its share of political turmoil, is about to get back full control of his band’s affairs.

The band was placed in third-party management several years ago after allegations of corruption, unfair dismissals, shady elections and sky-high debt. With the help of former chief John Spence, Beaulieu said the band cut staff and spending, held quarterly band meetings to improve transparency and improved enough to get an upgrade from third party to co-management. Now that the band has complied with all of INAC’s conditions, co-management will end April 1.

"I am on cloud nine," said Beaulieu. "It’s all about accountability and transparency and having good people working for you."

Bloodvein Coun. William Young said third-party management is a purgatory that leaves duly elected chiefs and councils largely powerless. It often means federal funding dries up for housing and other services.

Bloodvein was in third-party management for eight or nine years before it was upgraded to co-management.

At one point, the reserve’s school was so short of supplies it was borrowing paper and pens from the nursing station, said Young.

"I wouldn’t want to wish any First Nation third party," he said. "Everything is at a standstill."